When Americans think about monopolies, massive corporations that dominate markets come to mind, but that’s not always the case. A working paper from the Mercatus Center reveals a seldom acknowledged monopoly problem. That is, federal labor laws force workers to fund union operations that they might not support–a point that our own Phil Wilson wrote about at length–while also barring alternative representation options.
The research, which analyzes 147 studies from over three decades, showcases a fundamental problem with federal labor law. Under the NLRA, a union that wins majority support in an election becomes the exclusive representative for all those workers, even those who voted against joining. Unions then merrily take monetary resources to represent everybody, including workers who never wanted to be union members. That cycle fuels a system that prioritizes union dues collection over worker choice.
An Inescapable Dues Trap for Workers
Here’s where the monopoly becomes especially troubling. Current law requires unions to represent all workers in a bargaining unit, which unions cite as justification for mandatory dues or fees. Unions also aggressively oppose right-to-work laws because they jeopardize their guaranteed revenue stream. As a result, even Beck objectors are trapped into paying dues that are related to collective bargaining.
Additionally, this arrangement serves union fat cats far more than worker interests. The system also essentially creates a government-enforced customer base. Workers cannot then negotiate individually with their employer, and in many states, they can’t even opt out of paying dues. These workers also face an uphill battle to decertify a union, and a second union cannot come in to compete with the first union, either.
Quite simply, federal labor law allows unions to get comfy once they win an election. They then spend millions of members’ dues dollars on political or recreational activities, which many workers oppose, with precious little accountability.
The Devastating Cost of Union Membership
The gathering of studies also points toward dire consequences of unions’ government-protected monopolistic privilege to extract maximum dues. That is, Big Labor prioritizes short-term “wins” that favor union power over workers’ interests. As history shows, this leads to lower employment growth with fewer jobs available and reduced investments in innovation.
The Rust Belt’s manufacturing employment decline between 1950 and 2000 is a prime example of such devastation. Excessive union demands and frequent strikes drove investment and productivity down, even prompting companies to relocate. Countless workers lost their livelihoods, but of course union leaders maintained their positions and salaries.
More recently, UPS announced major layoffs that were largely caused by higher labor costs due to the Teamsters declaration of contract “wins.” Stellantis likewise faced workforce reductions one year after UAW Big Three negotiations. In both cases, unions declared victory and pointed the finger over job cuts that they had a hand in causing.
Is Labor Law Reform Possible in the U.S.?
The Mercatus Center proposes allowing workers who opt out of union membership to negotiate directly with employers like they can in non-union companies. Those who prefer union representation would still receive it and pay dues accordingly. Crucially, unions would then no longer represent non-members, although they’d surely have complaints as a result.
Will this happen? Probably not, if union lobbying continues as it currently exists. The real issue is that unions aren’t worried about representing non-members but about losing dues revenue. Of course, if unions provided real value, workers would join them voluntarily. Instead, an enormous amount of resources to maintain laws that keep workers bound to unions – and in creating new laws that do the same – come from unions themselves.
